Carolyn Rafaelian has built Alex and Ani from a side business to a fully-fledged powerhouse, but is all that glitters really gold?

It’s early afternoon on a Thursday at the headquarters of Alex and Ani, and the scene in CEO Carolyn Rafaelian’s office feels more junior-high slumber party than corporate strategy session. Five women crowd around a black stone desk embedded with protective crystals to talk about the ways—myriad, it turns out—one can convey pure love in recycled brass form.

“Pure love,” the phrase and the concept, comes up a lot around here, along with hashtag-worthy keywords like “authenticity,” “connected” and, of course, “blessed,” as probably well it should. Led by Rafaelian—Alex and Ani’s 49-year-old founder, life force and mother hen—the wildly, if somewhat improbably, successful jewelry and lifestyle brand recently valued at $1 billion has almost single-handedly revitalized Rhode Island’s economy and made more than a few people very rich with $28 bangles featuring New Age messages of empowerment and enlightenment.

It’s not just talk: Rafaelian lives the life she sells and so, it seems, do many of her employees. Over the course of an afternoon, she uses “pure love” to describe everything from how she approaches design to what it was like growing up the second oldest of five in a tight-knit Armenian-American family. Staffers like Kate Richard use it to characterize the company ethos, saying, “I believe that more than anything else, Carolyn wants me to be happy and healthy.” Online, website copy uses “pure love” to sell the brand’s Rose Charm bracelet, a “meaningful bangle for guidance on the road to romance.”

In under 10 years, Alex and Ani has become one of fashion’s unlikeliest success stories, growing from 23 employees and $2.2 million in revenues in 2009 to more than 1,000 employees and $230 million in revenues by the end of 2013. While few companies succeed at the hands of any one person, Rafaelian has been far more than a founder-turned-figurehead, relying on a brand of management that is equal parts optimism and self-assuredness. She is very smart, but she’s also smart enough to hire people who are smarter.

The office itself, 48,000 square feet of immaculately decorated space overlooking a strip mall in suburban Cranston, Rhode Island, Rafaelian’s hometown, is bursting with positive energy, or at least the physical representations of it. On Rafaelian’s office door hangs an Atlantean symbol “for spiritual protection,” and employee desks are custom-made with crystal insets (also built into the walls). They’re also adorned with black-and-white marble statues of Rafaelian’s personal totem, a panther, meant to ward off negative energy. She identifies with panthers because, she says, “they can see through darkness.” All 360 employees at headquarters get one.

Richard has worked at the company for three years, starting out as Rafaelian’s assistant and moving her way up to VP of business development, a job that puts her at Rafaelian’s side almost constantly. Friends, she says, often ask her if she and her coworkers do, “like, trust falls and séances in there,” she says. “But whether you believe that spirituality is a thing, my feeling is the investment was made. Like, whether or not it resonates with you, it resonates with [Carolyn], and it’s important for her to feel like she’s done everything she can to make this workplace amazing.” Cynics, she says, “weed out quick.”

In interviews that include, at any given time, up to seven people (but, despite requests, never Rafaelian alone), the CEO and her team echo one another in saying they believe the unconventional culture, the very uncorporate-ness of the corporation, is what makes working here—and, by extension, the products they sell—special. The fans responsible for helping fuel Alex and Ani’s meteoric rise would seem to agree: They buy Alex and Ani as much for the meaning and power behind the pieces, for their wide-eyed, open-hearted anti-cynicism, as for fashion. The brand’s self-published book, Path of Life: Why I Wear My Alex and Ani, features hundreds of customers—breast cancer survivors, single moms, teens—sharing often deeply personal stories about what the bracelets mean to them, why they wear them, how they have no less than changed their lives. One bangle, of course, is never enough. Says Rafaelian, “We encourage people to ask themselves, ‘What makes me tick?’ ” People apparently ask themselves that question a lot. On a recent weekday afternoon outside the brand’s Detroit store, the line snakes around the corner. There’s no real reason, no special event or sale—just a seemingly insatiable appetite for charm bracelets. This scene is not unique to Detroit, and the brand has more than 50 stores like this across the country.

Not everyone Alex and Ani has touched, however, is left glowing. Among a number of recent lawsuits directed at the company, one filed by Michael Mota, a former executive at the brand’s media subsidiary, accuses Rafaelian of wrongful termination and of forcing him and other employees to regularly meet with the company intuitive. In the suit, he alleges the intuitive would ask probing questions about his personal life and then report her findings to Rafaelian. Alex and Ani filed a countersuit, accusing Mota of defamation and saying he was fired for reasons that included “inappropriate and unprofessional management style.” (There’s no denying, however, that there’s a company intuitive. There’s also a shaman and an animal communicator with a background in dolphin research, though at Alex and Ani, her title is “master symbologist.” Her job is to use numerology to figure out the best dates to unveil new Alex and Ani boutiques, “clean and bless” all spaces pre-opening and routinely clear the offices of “heavy energy.”)

While the vibe at world headquarters is casual, with Rafaelian setting the tone in her typical trendy-weekend style—a soft-pink sweater, little makeup, nude open-toe wedges kicked off to expose bright orange toenails—it quickly becomes clear that beneath the current of caring and undeniably appealing feminine strength lies a certain rigidity; that unconventionality does not equal lack of discipline. Rafaelian may be a warm and nurturing leader who does not look out of place among staffers 20 years younger, but she didn’t build her brand by not paying attention to detail—or making sure someone else does.

This manifests itself in various ways, from a PR team insisting on questions up front and then sitting or listening in on every interview to Rafaelian showing up to the magazine’s photo shoot with her own art director. One of the reasons the company has 1,100 employees is that Rafaelian prefers overseeing to outsourcing, and Alex and Ani subsidiaries include an advertising firm and a video-production team, which trails Rafaelian nearly everywhere she goes.

Still, she prefers to give most of the credit for her success to God and the universe, sticking to a script straight out of The Secret and, above all, keeping the focus on the positive (which is why, she says, she won’t comment on the lawsuits). “I don’t want to say I didn’t take anything so seriously, but I never had an agenda,” she says. “My prayer always was just, ‘Let me attract the people who do what they do with their talent as good as and as pure as what I do with mine.’ You know, we work hard here. There’s no fluff. But we giggle a lot, we have fun, we joke around.
We genuinely care about one another. But there really isn’t any room for nonsense.”

For centuries, Rhode Island was the country’s biggest jewelry manufacturer, ever since goldsmith Nehemiah Dodge invented a way to plate gold and silver onto cheaper metals in the late 1700s. By the end of the next century, the state was producing a significant portion of all the jewelry made in the U.S. But since the industry’s 1950s heyday, when it employed as many as 16,000 people in a state of just 1 million, most of the manufacturing has gone overseas, leaving behind empty factories and the many families who had for generations made their living in them.

Rafaelian was born into the business and, as a teen, saw it start to crumble around her. Growing up, she and her siblings associated their parents’ jewelry factory, Cinerama, with punishment, since that’s where they were sent whenever they misbehaved, which in Rafaelian’s case was often. “When you got in trouble and your mom had five kids to deal with, she’d pack you all up in the car and say, ‘You’re going to the factory and you’re going to work,’ ” she says. “We’d sit there for hours, carding earrings.” But it also became a sort of home, and along the way, Cinerama taught Rafaelian what it meant, and how it felt, to work hard.

Still, she never meant to go work for her family—she wanted something more glamorous, and away from Rhode Island. But after a few years of college in L.A., eventually followed by a stint in New York City working in fashion PR, Rafaelian ended up back where she began, not unlike many Rhode Islanders. “It’s just this weird thing,” she says. “I love the four seasons, even though the snow can be overwhelming sometimes—that’s why God invented Florida—but there’s something magical about Rhode Island.” She used her fashion connections to land the factory accounts, designing and producing private-label collections for brands like Victoria’s Secret and Express, and the work was lucrative. Soon, she was almost single-handedly keeping the factory afloat. “I remember looking around and seeing everybody so busy, and I realized, holy God, they’re all working on my stuff,” she says. “It wasn’t my dad anymore that was in charge, and they were counting on me. And that was the day I’m like, boom, boom, boom, boom. I knew what to do.”

But while the work was profitable and factory-saving, it wasn’t entirely fulfilling. On the side, Rafaelian began creating her own pieces, mostly for fun and relaxation, soldering and manipulating metals into bracelets and pendants for friends. While the private-label work “didn’t have anything more than, you know, the color palettes and the seasons,” she says, the pieces she wanted to give as gifts had special meaning—“they were more than just pretty,” as she puts it—and featured charms with symbols and saints meant to help people find love or to protect them while traveling. It wasn’t long before friends were asking her to make bracelets they could give as gifts too. She eventually inked a deal with a New York showroom rep who liked her work and the fact that she had a factory behind her, and in 2004, she gave the line an official name, after her first two daughters. The rep helped her get a few big orders, including placement at Henri Bendel, Fred Segal and a handful of small boutiques. “And then, all of a sudden, God invented the Internet for me,” she says.

The decline in Rhode Island’s jewelry industry proved to be Rafaelian’s good fortune. Beside the personal access she had to a factory—and to vendors her family had worked with for decades—she was able to buy materials on the cheap from other local factories shutting down. But luck was only a tiny part of her success. She worked hard, and she worked a lot, even after she and her husband split up, while their three daughters were still in grade school. “My conversations with my kids when they were little squirts were like, ‘Mommy’s going to work her ass off, and all I need from you is don’t get crazy with the boys, make sure you do good in school and stay away from drugs,’ ” she says. “But as far as the whole working-woman thing goes… Let’s not forget, we are a strong species. I think men have their challenges now, women have their challenges now, but it’s only a challenge if you want it to be a challenge. My father did not treat any of us differently, my brother or his girls. We did what we needed to do, we were all treated the same and we made what we made out of life.”

As an early pioneer of the highly profitable phenomenon now known as metrospirituality—since adopted by brands like Lululemon and SoulCycle—Rafaelian also tapped into a new way that people were beginning to shop, and give. That became especially poignant around the 2008 economic crash, which happened just as Alex and Ani was ramping up. “That was when people started to look for far more meaning from their brands,” says Milton Pedraza, CEO of the Luxury Institute. What consumers wouldn’t spend on frivolous luxury went into goods that could be seen, he says, “as therapeutic or in any way emotional. It’s easier to rationalize.” As the economy healed, certain holdovers remained. “Travel, experiences, those are now as important as goods,” he says. “These days, people want pieces that enrich the experience of life. That’s why Alex and Ani has been so successful. They sell the message that you can be enriched without being rich, and that’s appealing across all genders and across all generations.” It’s a way to be a consumer without necessarily feeling like one.

Critical in helping Rafaelian profit from positivity has been the brand’s Charity by Design division, which for five years has worked with more than 50 nonprofits, including the March of Dimes, Living Water International, VH-1 Save the Music Foundation and the American Heart Association, to create and sell original charms for fund-raising. Alex and Ani designs, produces and sells the pieces; the charities collect 20 percent. In September, the brand launched a cherub charm to benefit Hasbro Children’s Hospital. (“The cherub is, like, universal—everybody loves the cherub,” Rafaelian notes.) “The law of the universe is the more you have, the more you have to give,” she says. “So for me, it was important that every time we did something major, there was something that benefited from it. But I also felt that this might be the new model of doing business.” As of September, the brand had donated a total of $25 million to various charities through the program.

Nicki Maher, who as senior vice president of global brand relations oversees Charity by Design, as well as licensing and partnerships with brands like Disney and the NFL (there are charms for every character and every team logo), describes Charity by Design as its own third-party cause-marketing business. That’s what makes it unique—and impactful. “The department has 12 people fully functioning full time in order to set up the systems that can give back,” she says. “I can’t think of many companies that have 12 people who are literally given a full salary to be able to hit the community hard.” It wasn’t always this way. Not that long ago, Maher also served as the customer service center. “Charity by Design, answering customer service calls, like, we just did everything,” she says. “So anybody that complains, I’m just like, really? You have no idea. I love people with that approach, that are just like, give me more, give me whatever.”

Giving is definitely a prevailing theme, if not a full-on mandate, and employees are certainly not exempt. “I just found out my design team is here until nine o’clock every night,” Rafaelian adds. “I’m like, ‘Ooooh, yeah, they’ve been cranking.’ And they love it. I got to get them pizzas or something.”

Rafaelian was right about Charity by Design’s potential as a business strategy. The program has been critical in helping propel Alex and Ani’s growth. Buying things makes people feel good; buying things that also funnel money into charity makes them feel even better—especially when they’re things they’d buy anyway. As Maher points out, “The CBD customer has the longest retention rate, because they are charity-minded, they’re charity-conscious and once they support one charity, they’re intrigued to find out what else we can come up with.” It helps that the Charity by Design pieces aren’t too aesthetically tied to a foundation; the bangle benefiting the Juvenile Diabetes Research Foundation, for example, is a pair of interlocked otters. “People who are touched by juvenile diabetes have such a support-like following, so the concept of otters came up because otters continuously link by the hands,” says Maher. “When we pitched it to Juvenile Diabetes, we said, ‘This is the design we came up with for you because of all the things we heard about you as an organization.’ They loved it, but they’re almost like, ‘Well, that’s not our design, that’s not on any of our stuff.’ But when they get the first check, they’re going to go, ‘Oh my God, you’re genius.’ ”

That said, also critical in recent years was Alex and Ani’s former CEO Giovanni Feroce, who departed suddenly last year. By Rafaelian’s own admission, Feroce was responsible for the brand’s explosive growth, which worked well for a time. But Feroce wanted world domination, and Rafaelian, though ambitious, is still a Rhode Island girl at heart. She had what she needed. When Feroce left the company, the local media reported that it was because Rafaelian wasn’t ready for the brand to get so big, though she won’t comment about his departure. In the spring, a year after Feroce left, she named Harlan Kent, a fashion executive who came from C. Wonder, as his replacement, though with the title of president. (Rafaelian remains CEO.)

Rafaelian won’t make Kent available for comment, so it’s hard to know whether the buzz around the departure is anything more than bluster, or what, if any, changes he plans. But it’s not the only recent HR challenge. In August, the brand’s CMO—who had been credited with growing online sales at an annual rate of 185 percent over the past five years—was arrested for breaking into a house, throwing a party and stealing some jet skis. He “parted ways” with the company in October, a few weeks after the brand debuted its mobile app.

If Rafaelian is concerned, she reveals none of it. Alex and Ani is her baby, but it’s not her only one. Amid rumors of struggles post-Feroce, she has been focusing on side projects that include two Rhode Island properties she bought in near-ruin and is working to restore: Belcourt of Newport, a 40,000-square-foot mansion along Newport’s Bellevue Avenue currently being renovated under the direction of her boyfriend, a contractor named Joe Triangelo, and Carolyn’s Sakonnet Vineyard, a vineyard she bought (and named after herself), which produces blends with names like “NV Blessed Blend Red,” a merlot-cab mix, and “Expedite Happiness,” an oaky chardonnay. Alex and Ani, meanwhile, has expanded into accessories like wallets and clutches and home goods like candles, hand cream and soap. All product formulations are created in an in-house lab, naturally, run by a twentysomething Rafaelian refers to as “Beauty Joe.”

And people seem genuinely happy here at headquarters. There’s a subsidized organic café downstairs and, during the summer, an open invitation to the Thursday-night concert series at the vineyard. Rafaelian is very generous with her time and her energy, and people like to be around her. “I do believe you can’t fly into something blind, without a plan,” she says. “And if it’s not going to plan, maybe you need to stop and think. Maybe God’s trying to send you a message or get you back on course or give you a life experience that’s going to make you realize something bigger, stronger and more powerful so that you have another experience that gets you to the next level. Because that’s all life is: one big gigantic experience.”

Source: dujour.com